What Form Does a Partnership File?

Individuals or entities forming a business together often create a partnership. This structure offers flexibility and shared responsibility. From a tax perspective, a partnership is a pass-through entity. The business itself generally does not pay federal income tax; instead, profits and losses pass through to partners, who report these amounts on their individual tax returns. Understanding required tax forms is key to managing a partnership.

Understanding the Main Partnership Tax Form

The primary federal income tax form for partnerships is Form 1065, U.S. Return of Partnership Income. This information return provides the Internal Revenue Service (IRS) with an overview of the partnership’s financial activities. Partnerships use Form 1065 to report income, gains, losses, deductions, and credits, which determines each partner’s share.

Entities required to file Form 1065 include general partnerships, limited partnerships, and limited liability partnerships (LLPs). Multi-member limited liability companies (LLCs) not electing corporate taxation are also typically treated as partnerships for federal income tax purposes and must file Form 1065. A partnership generally must file this form unless it neither receives income nor incurs any expenses treated as deductions or credits for federal income tax purposes.

As an information return, Form 1065 aggregates financial data, but tax liability flows directly to partners. Each partner reports their share of the partnership’s income or loss on their personal tax return, regardless of distribution. This pass-through structure avoids the double taxation seen with corporations.

Key Information on the Partnership Return

Form 1065 compiles a partnership’s financial and operational data. Initial sections gather basic information like the partnership’s name, address, Employer Identification Number (EIN), principal business activity, start date, and accounting method (cash or accrual). This helps the IRS identify and categorize the business.

The form details income, deductions, and credits, including gross receipts, cost of goods sold, and other business income. Deductible expenses like rent, wages, depreciation, and guaranteed payments to partners are also reported, reducing the net income passed through to partners.

Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc., is prepared for each partner. It details their individual share of the partnership’s financial results, including ordinary business income or loss, net rental real estate income or loss, interest, dividends, capital gains and losses, and various deductions and credits. Partners use Schedule K-1 information to prepare their federal income tax returns (e.g., Form 1040).

Form 1065 also includes other schedules. Schedule L, Balance Sheets per Books, reports assets, liabilities, and partners’ capital accounts. Schedule M-1, Reconciliation of Income (Loss) per Books With Income (Loss) per Return, reconciles book income with tax income. Schedule M-2, Analysis of Partners’ Capital Accounts, tracks changes in partners’ capital accounts, detailing contributions, distributions, and their share of income or loss. Smaller partnerships may be exempt from filing Schedules L, M-1, and M-2 if they meet certain criteria, such as having total receipts and assets below specified thresholds (e.g., less than $250,000 in receipts and less than $1 million in assets).

Other Essential Partnership Forms

Beyond Form 1065 and Schedule K-1, other IRS forms may be necessary based on a partnership’s activities. For international activities, U.S. persons owning interests in foreign partnerships may file Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships. This form details controlled foreign partnerships, transfers, and changes in interests.

Additional forms may be required for other situations. Partnerships with employees file employment tax forms such as Form 941, Employer’s Quarterly Federal Tax Return, and Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. Payments to independent contractors may require Form 1099-NEC, Nonemployee Compensation. Forms for specific tax credits, depreciation, or sales of business property (e.g., Form 4562, Form 4797) could also be needed.

Beyond federal requirements, partnerships must consider state-level tax obligations. Most states have their own partnership return requirements, separate from federal filings. These state forms often mirror federal Form 1065 but may include state-specific adjustments or entity-level taxes, or require withholding on income for nonresident partners. Tax compliance extends to both federal and state jurisdictions.

How to File the Partnership Return

Filing the partnership return involves specific procedures and deadlines. Form 1065 can be filed electronically via IRS-authorized software or by mail. Electronic filing is often preferred for speed and confirmation of receipt, utilizing the IRS Modernized e-File (MeF) system.

For calendar-year partnerships, Form 1065 is due by March 15th of the year following the tax year, or the next business day if March 15th falls on a weekend or holiday. Fiscal year partnerships must file by the 15th day of the third month after their tax year closes.

If a partnership needs more time, it can request an automatic six-month extension by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, by the original due date. This extends the filing deadline, typically to September 15th for calendar-year filers, but not the time to pay taxes owed. E-filed returns usually receive IRS confirmation of receipt.